Denver, March 28, 2017 – Colorado Enterprise Fund (CEF) released the following statement today from CEF President and CEO Ceyl Prinster in response to the Trump Administration’s proposal to eliminate funding for the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund).
“Colorado Enterprise Fund is deeply disappointed that the Trump Administration has proposed a budget for both fiscal years 2017 and 2018 that all but eliminate federal support for the U.S. Treasury Department’s CDFI Fund by slashing its grant program. The CDFI Fund is a critical resource for the economic growth of low-income communities throughout the nation and in Colorado. CDFIs are mission-driven financial institutions that provide affordable credit, technical assistance, capital, and financial services to residents and businesses in capital-starved communities. CDFIs fill a vital need in the nation’s financial services eco-system by serving communities and market sectors that conventional lenders cannot. The ultimate goal of CDFIs is to bring their customers into the mainstream economy as bankable businesses, home owners and/or individuals.[i]
Nationally, there are more than 950 certified CDFIs. In FY 2016, CDFI Fund Awards supported the creation of tens of thousands of jobs, financed more than 11,000 businesses, and built over 33,000 affordable housing units. Elimination of the CDFI Fund would deprive low-income communities billions of dollars in financial products and services that help communities and businesses grow and thrive.[ii]
In Colorado, there are 15 CDFIs that have received $40.3 million of direct CDFI Fund Awards that have been leveraged with other capital. Across the state, CDFIs serve a variety of markets and sectors, providing capital where banks will not lend and gap financing when banks can’t lend enough. According to the national CDFI Coalition, CDFIs leverage federal dollars by as much as 12 to 1 with private investment from banks, foundations and other funding partners. Thus, the total economic impact of CDFI grants in Colorado is as much as $480 million supporting businesses, affordable housing and nonprofit community projects.
CEF was the first mission-driven lending organization in Colorado certified by the CDFI Fund in 1996 to serve low-income and minority populations. Over the last two decades, CEF has leveraged $8.5 million in CDFI Fund Awards to loan more than $58 million, financing nearly 2,000 small businesses in our state. More than 83% of our loans have helped businesses owned by women, minorities and low-income people, and have created and retained more than 17,000 jobs. Additionally, CDFI Fund Awards have helped CEF create a Healthy Foods Loan Program, which supports businesses that provide fresh, nutritious and affordable food to alleviate food deserts in our state. Since 2013, CEF has provided $1.3 million in Healthy Foods funding to 32 food-related small businesses.
The CDFI Fund costs each American just 79 cents per year to provide loans that create tens of thousands of jobs, businesses and affordable places for people to live. Since its inception, the CDFI Fund has received bipartisan presidential and Congressional support. In a letter dated March 14, 2017, all of the major banking associations, including the American Bankers Association, voiced their support to Congress for the continued funding of the CDFI Fund at the $250 million annual level. We now look to Congress to maintain this vital funding in its annual appropriations process and urge our partners to submit letters of support to their local representatives.”
For more information, additional resources, and recommendations provided by the national CDFI Coalition on this issue see the Policy and Advocacy information located here.
About Colorado Enterprise Fund
Founded in1976, Colorado Enterprise Fund (CEF) provides loans up to $500,000 to finance small businesses and startups unable to secure funding through traditional banks. With a mission to accelerate community prosperity by financing and supporting entrepreneurs and small businesses, CEF has provided more than $58 million in loans to nearly 2,000 businesses to help create or retain over 17,000 jobs in the state. A nonprofit Community Development Financial Institution (CDFI), CEF is based in Denver with a satellite office in Fort Collins. CEF’s lending and consulting services are available statewide. For more information, visit: www.coloradoenterprisefund.org